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grade level: 3-5
curriculum standards:
2
4
10
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posted on: July 25, 2005
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This lesson provides you with the resources that you will need to teach this lesson. We have also provided a link for your students to follow this lesson online. The link below contains only the information your students need:
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You Can BANK on This! (Part 3)
Key Economic Concepts:
Building on the first two lessons in the series, this lesson deals with savings and interest.
Students will:
- Identify interest as a benefit of saving.
- Demonstrate expected costs and expected benefits of SAVING using a chart.
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Part 3 |
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Savings is such an important component in future economic health, and yet it is a concept that many students are not introduced to at a young age. The student will do a drop and drag activity. This activity will be a cost-benefit chart about savings. This lesson explains how having a savings account has benefits.
•"Aesop Fables": The Aesop fable about the grasshopper and the ant.
www.dltk-teach.com/fables/grasshopper/mstory.htm
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•"Banking on our Future": The main website for these lessons. In this section, the students get to learn how to fill in different banking forms.http://www.bankingonourfuture.org/
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www.bankingonourfuture.org/master.cfm/main/home
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Note: The students will have to go through a free sign-up process in order to use the website. Here are the fields that students will be required to fill out: Name, Title, Gender, User Name, Password, Secret Question, How You Heard About the Site, and Why You Picked the Site.
•"Allowance": An allowance page at will show students how long they will have to save to purchase listed items.
www.cibc.com/ca/youth/under-12/allowance-room/allowance-room.html
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•Interactive Activity from lesson EM377: Interest Calculator
•"How Stuff Works": This website is used to explain what a savings account and ATM is.
money.howstuffworks.com/
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Learning to save is very important to our students' future. As teachers we need to be armed with knowledge about the benefits of saving. We need to let the students discover that there are rewards involved in saving their money.
What are those rewards? Well, if you save money in a bank you receive interest. This lesson is about interest. Since this is
an introductory lesson on interest, the website uses a flat 10% interest rate for simplicity. Make sure you tell students that 10% is not a realistic interest rate for a savings account, but that 10% is going to be used because it is easy to figure.
In the Extension activity at the end of this lesson, there is an idea for comparing prices on this allowance room site to actual prices that can be found on the web.
Students may never have thought that there is an incentive to saving. To the students it may seem that asking them to save is more about costs than benefits. The students have to be given some sort of idea that there is an incentive to saving. That incentive is the INTEREST paid to them by the bank for saving money. Lead them through the lesson about what INTEREST is and how it is accumulated.
First of all, talk to the students about banks. Banks are financial institutions that help people save money and earn interest. How do they do that? Because they also let other people borrow money and those people pay the banks interest.
Interest is paid by a bank to a person that allows the bank to use their money. So when you put money in a savings account, that money is used by the bank to loan to other people. Since they are using YOUR money, the bank pays you for that privilege. That makes your money work to make more money!
Take $100. Say the student puts $100 in a savings account at their bank. The bank takes their money and uses it to loan to someone else. Since it is their money the bank is loaning, it pays them interest. Now their $100 is worth more than $100 - it has worked for them! In our website, the interest is 10% so their account would be worth $110. Their money made them more money!
How can a bank give the person more money than they put in? Well, a person who borrows FROM a bank has to pay the bank interest. So, the person who asked for a loan must pay back more than just what they asked for. They pay the bank interest, and the bank pays us interest!Have your students Click here to experiment with our interest rate calculator. They can insert different interest rates and amounts of time to see how that affects how much their money can grow over a certain length of time.
Interest gives us the INCENTIVE to save with a bank. An incentive is
any reward or benefit, such as money, advantage or good feeling, that motivates people to do something. Discuss what incentive the students have in saving. Take the definition of incentive and see how it applies to saving. Would you have a good feeling knowing that you have money in savings? What motivates people to save? Interest is an incentive to save, but are there other reasons to save?
A veury interactive and motivational part of this lesson is learning about ATM machines and savings accounts. The students will also get a chance to practice writing checks. They can follow this link to learn about what an ATM [1] is, and how it works. Then, they can click here [2] to learn more about savings acconts. Lastly, they can print off this document to practice writing checks as well as recording their transactions in the check register.
This lesson gave the student a look at the workings of ATM and checking accounts. This lesson also focused on finding out that interest is one benefit to saving your money in a bank.
Students will do a drop and drag activity called Save My Money, the activity is about the cost and benefits of saving money.
In the Allowance Room website, many objects were found. The computer was listed at $2400. Could the students find a better buy in the Sunday newspaper ads? Could other prices be found on the internet? This is one way to extend this lesson by giving the students an opportunity to find other prices and compare it to the prices on this website.
Another lesson on saving with the same interest calculator can be found at: http://www.econedlink.org/lessons/index.php?lesson=EM377&page=teacher
The next lesson in Banking on Our Future is about credit. It can be found at www.bankingonourfuture.org/master.cfm/main/home
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Part 3 |
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Links Used:
1. ^ "ATM" - (www.howstuffworks.com)
2. ^ "click here" - (money.howstuffworks.com)
3. ^ "www.dltk-teach.com/fables/grasshopper/mstory.htm" - (www.dltk-teach.com)
4. ^ "http://www.bankingonourfuture.org/" - (www.bankingonourfuture.org)
5. ^ ^ "www.bankingonourfuture.org/master.cfm/main/home" - (www.bankingonourfuture.org)
6. ^ "www.cibc.com/ca/youth/under-12/allowance-room/allowance-room.html" - (www.cibc.com)
7. ^ "money.howstuffworks.com/" - (money.howstuffworks.com)
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